Skip to main content

Chanakya

Login

Varmora Granito IPO

Published: 17 September 2026 | 6.00 AM
Last Updated: 17 September 2026 | 11.30 AM

IPO Snapshot

Particulars Details
Chanakya View 🟡 Selective Apply
Overall Rating ⭐⭐⭐☆☆ (3/5)
GMP Today Updated Daily
Issue Size Rs. 708.02 Crore
Fresh Issue Rs. 320 Crore
Offer for Sale Rs. 388.02 Crore
Price Band Rs. 140–Rs. 148
Lot Size 101 Shares
Minimum Retail Investment Rs. 14,948
IPO Opens 22 September 2026
IPO Closes 24 September 2026
Allotment 25 September 2026
Listing 29 September 2026
Exchange BSE and NSE
Lead Managers JM Financial; Goldman Sachs India; SBI Capital Markets
Registrar KFin Technologies Ltd.

Investor Decision Box

Question Chanakya View
Suitable for Listing Gain? 🟡 Yes, if GMP and subscription remain healthy
Suitable for Long-Term? 🟡 Selective
Risk Level Medium to High
Business Quality ⭐⭐⭐⭐☆
Financial Strength ⭐⭐⭐☆☆
Balance Sheet ⭐⭐⭐☆☆

👉 | IPO GMP|IPO Reviews |IPO Subscription|IPO Allotment

Chanakya View

Varmora Granito Limited is an established ceramic and vitrified-tile manufacturer with eight manufacturing facilities, a distribution network and growing exposure to premium products. Its focus on technology-led designs, in-house manufacturing and branded retail outlets provides a credible market position.

FY26 profitability improved sharply, with profit after tax rising 79% to Rs. 55.09 crore. EBITDA also increased to Rs. 221.56 crore, while borrowings declined to Rs. 357.95 crore from Rs. 505.16 crore in FY25.

However, the IPO valuation appears expensive. At the upper price of Rs. 148, the post-issue P/E is 60.66 times and the price-to-book ratio is 3.74 times. ROE of 6.80% and ROCE of 9.89% remain modest. Moreover, Rs. 388.02 crore, representing more than half the issue, is an offer for sale and will not enter the company.

Investors should consider the IPO selectively after assessing GMP, institutional demand and final subscription trends.

Chanakya Recommendation: 🟡 Selective Apply

About the Company

Incorporated in 2003, Varmora Granito Limited manufactures and markets glazed vitrified tiles, polished vitrified tiles, ceramic tiles and related building products. Premium glazed vitrified and technical tiles accounted for approximately 84% of tile revenue during FY26.

The company operates eight manufacturing facilities in Gujarat’s Morbi ceramic cluster. In-house manufactured products generated 81.72% of FY26 revenue. Through a technology partnership with Italy-based SACMI, Varmora has adopted Integrated Stone Technology for premium tile development.

Its distribution network includes 305 exclusive brand outlets and 2,758 multi-brand outlets across India and overseas markets. The company also supplies builders, contractors, property developers and Government entities through its business-to-business channel.

Varmora has installed 16.22 MW of wind and solar renewable-energy capacity, supporting its sustainability initiatives and partially reducing dependence on conventional power. It employed 1,153 permanent personnel as of March 2026.

Why This IPO Stands Out

✅ More than two decades of experience in the tiles industry.

✅ Eight manufacturing facilities located in the Morbi cluster.

✅ Strong retail reach through 3,063 exclusive and multi-brand outlets.

✅ Premium products contributed a major share of FY26 tile revenue.

✅ PAT increased 79%, while borrowings declined during FY26.

✅ Fresh proceeds will primarily reduce group-level debt.

Key Risks

⚠ Post-issue P/E of 60.66 times appears demanding.

⚠ ROE and ROCE remain modest despite improved profit.

⚠ Offer for sale exceeds the fresh-issue component.

⚠ Tile demand is exposed to construction and real-estate cycles.

⚠ Energy costs, raw materials and intense competition may pressure margins.

Financial Snapshot

Varmora Granito’s total income increased gradually from Rs. 1,472.58 crore in FY24 to Rs. 1,492.68 crore in FY25 and Rs. 1,562.53 crore in FY26. Profit after tax fluctuated, falling from Rs. 44.94 crore in FY24 to Rs. 30.77 crore in FY25 before recovering strongly to Rs. 55.09 crore in FY26.

ParticularsFY26FY25FY24
Total IncomeRs. 1,562.53 CrRs. 1,492.68 CrRs. 1,472.58 Cr
EBITDARs. 221.56 CrRs. 198.29 CrRs. 150.33 Cr
Profit After TaxRs. 55.09 CrRs. 30.77 CrRs. 44.94 Cr
Net WorthRs. 796.88 CrRs. 722.90 CrRs. 678.59 Cr
BorrowingsRs. 357.95 CrRs. 505.16 CrRs. 412.89 Cr

Objects of the Issue

The company proposes to use Rs. 245 crore from the fresh issue to repay or prepay borrowings and accrued interest belonging to Varmora Granito and subsidiaries Covertek Ceramica, Varmora Sanitarywares and Simola Tiles. The remaining net proceeds will be used for general corporate purposes.

Valuation and Key Ratios

At the upper price of Rs. 148, Varmora Granito’s post-issue market capitalisation is approximately Rs. 3,344.97 crore. Diluted EPS is Rs. 2.44, resulting in a P/E ratio of 60.66 times. The price-to-book value is 3.74 times.

FY26 EBITDA margin stood at 14.18%, while PAT margin was 3.53%. ROE was 6.80%, ROCE was 9.89% and RoNW was 7.79%. Although profitability recovered, these return ratios do not provide strong support for the premium valuation.

Promoters and Shareholding

The promoters are Bhavesh Vallabhdas Varmora, Hiren R Varmora and Pramodkumar Parsotambhai Patel. Promoter-group ownership will decline from 52% before the IPO to 46.55% afterward. Public shareholding will increase from 48% to 53.45%.

Katsura Investments is selling 2,62,17,634 shares worth Rs. 388.02 crore through the offer-for-sale component. These proceeds will go to the selling shareholder and not to Varmora Granito.

Final Assessment

Varmora Granito has a recognised brand, premium-product exposure and broad distribution. Improved EBITDA, higher FY26 profit and lower borrowings are encouraging.

Nevertheless, the demanding valuation, modest return ratios and sizeable offer for sale reduce investment comfort. Investors may apply selectively only if GMP, QIB participation and subscription trends remain strong. Long-term investors should evaluate whether sustained earnings growth can justify the P/E exceeding 60 times.

Leave a Reply

Your email address will not be published. Required fields are marked *